-LRB- CNN -RRB- -- The Department of Energy is putting federal money behind the development of small-scale nuclear reactors that supporters say are cheaper , safer and easier to build , though the design still needs federal approval .

The first award under a $ 452 million program to boost the development of small modular reactors will go to a consortium led by Babcock & Wilcox and the Tennessee Valley Authority , the Southeastern utility that already operates three commercial nuclear plants . The reactors will be about a third the size of those now used in nuclear power plants , with the B&W design generating about 180 megawatts of electricity -- enough to power almost 200,000 homes .

However , industry skeptics say the economics and the safety of the concept remain untested .

The total amount of the award has yet to be calculated , but the government will pay up to half the project cost and will work with the companies to get the new reactors licensed and operating within 10 years , the Energy Department said .

`` Restarting the nation 's nuclear industry and advancing small modular reactor technologies will help create new jobs and export opportunities for American workers and businesses , and ensure we continue to take an all-of-the-above approach to American energy production , '' Energy Secretary Steven Chu said in a statement announcing Tuesday 's decision .

Unlike current designs , the units -- shorthanded as SMRs -- are designed to be installed underground instead of being located inside towering concrete buildings . They could run longer on the same nuclear fuel , and additional reactors could be added in a `` plug and play '' fashion , said Paul Genoa of the Nuclear Energy Institute , the industry 's trade association .

`` You do n't have to build a 1,000 - or 1,500-megawatt power plant and hope that demand catches up , '' said Genoa , the NEI 's senior director of policy development . `` You can build chunks of power to more closely meet your demand curve . ''

Nuclear plants provide about 20 % of the U.S. electric power supply , but most of the 104 operating reactors date back to the 1960s and '70s . The Obama administration has supported the construction of the first new reactors since the 1979 partial meltdown at Pennsylvania 's Three Mile Island plant , providing $ 8 billion in federal support for two nuclear power plants in Georgia .

The industry and the Energy Department say that would make SMRs a good choice for small utilities . But the designs are still under review by the Nuclear Regulatory Commission , whose approval is the worldwide `` gold seal , '' Genoa said .

The NRC launched a widespread review of U.S. nuclear safety after the meltdowns at Japan 's Fukushima Daiichi nuclear power plant in 2011 caused by that nation 's devastating tsunami . Genoa said safety and security recommendations issued after that disaster -- and after the September 11 , 2001 , terror attacks on New York and Washington -- are being included `` from the ground up . ''

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Placing the reactors underground would make them less vulnerable to the shaking from earthquakes , and the surrounding earth would absorb much of the heat released if an accident occurred , Genoa said . The new designs are `` orders of magnitude safer '' than existing plants , `` and we believe those plants are safe , '' he said .

But Edwin Lyman , a nuclear expert at the Union of Concerned Scientists , said the advantages touted by the industry -- smaller facilities and fewer workers -- could be `` invitations to disaster . ''

`` What Fukushima has shown us is that existing nuclear power plants do n't have the personnel or resources to cope with severe emergencies , '' said Lyman , a physicist and senior scientist with the watchdog group . In addition , the modular design could make it more difficult to inspect and maintain key components , many of which would be located within the pressure vessel at the heart of the reactor , he said .

Lyman also questioned claims that about the cost advantages of the smaller reactors , noting that the boom in natural gas is squeezing even established nuclear utilities .

`` The SMRs are without a doubt going to be more expensive than even large reactors , '' he said . `` Their economics are only getting worse . ''

Genoa acknowledged that some design issues `` cut both ways , '' and that the first companies to adopt the new technology will incur higher costs . But he said the experience of other industries , such as aerospace or the U.S. nuclear submarine program , shows costs can drop significantly over the life of a program .

`` It 's important to understand that these designs are in the early stage -- at best 20 % to 30 % complete , '' he said .

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The Energy Department announces support for small modular reactor design

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Supporters say the units will be cheaper and safer than current reactors

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U.S. regulators are still reviewing the designs